DEPARTMENT OF HIGHER EDUCATION AND TRAINING Presentation to: Standing Committee on Appropriations 2015 Appropriation Bill 26 May 2015

DEPARTMENT OF HIGHER EDUCATION AND TRAINING

Presentation to:Standing Committee on

Appropriations2015 Appropriation Bill

26 May 2015

1. Strategic Overview2. Addressing the matters requested by the Appropriations

Committee including:• An overall assessment of 2015 Appropriation Bill• Ensuring all funded entities effectively spend transferred funds

and performance targets are met• Ensuring all students succeed in higher education, drop out rates

are minimised and completion rates increased• Ensuring budget alignment with broader sector regarding

coordination of Outcome 5• Significant projects and risks• Efforts to leverage partnerships for additional resources for

higher education sector• Implementation of cost containment measures and cost effective

service delivery models

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Presentation Outline

Strategic Overview

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• The Department of Higher Education and Training is responsible for all post-school education and training in the country

• It is the coordinating Department for Outcome 5 of government’s 14 outcomes “A skilled and capable workforce to support an inclusive growth path”

• In 2014, the Department released a White Paper for Post-School Education and Training (PSET)

• The White Paper has created a framework that defines the Department’s vision for PSET, its focus and priorities

• The Strategic Plan covers the period 2015 to 2020 and is informed by the vision espoused in the National Development Plan, 2014 - 2019 Medium Term Strategic Framework (MTSF) and imperatives of the White Paper

VisionLeading Post-School Education and Training for growth

MissionTo provide national strategic leadership in support of an

integrated Post-School Education and Training system towards improved quality of life of the South African citizenry

Strategic Overview

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• Strategic Goal 1: To provide a sound Post-School Education and Training legislative framework

• Strategic Goal 2: To provide Post-School Education and Training services• Strategic Goal 3: To provide Post-School Education and Training capacity• Strategic Goal 4: To facilitate a strong stakeholder network• Strategic Goal 5:

To ensure continuous business excellence within the Department of Higher Education and Training

Five Year Strategic Goals

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In line with the strategic goals identified, we will:•Develop and review legislative frameworks aimed at steering the Post-School Education and Training system in line with the imperatives of the White Paper•Strive to expand and improve the quality of Post-School Education and Training by introducing appropriate teaching and learning support interventions for Universities and Technical and Vocational Education and Training (TVET) colleges, as well as artisan development•Establish, develop and expand a new institutional type –Community Colleges – primarily to promote education and training opportunities for those young people who cannot access the universities or TVET colleges


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• Improve the capacity of the system through infrastructure development for technical and vocational education and training

• Maintain good stakeholder relations in support of an effective Post-School Education and Training system

• Ensure good corporate governance including efficient resource management within the Department and its entities.


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• To substantially expand access to education and training for youth and adults, regardless of whether or not they have completed school

• To improve the alignment between universities, TVET colleges, Sector Education and Training Authorities (SETAs), South African Qualifications Authority (SAQA) and quality councils in an effort to improve student and learner mobility across institutions and qualifications

• To expand the availability of opportunities for workplace training for students in colleges and universities and to expand other forms of workplace training such as learnerships and apprenticeships

Focus Areas in the Next Five Years

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• To ensure that our Post-School Education and Training system prioritises funding of the marginalised, enabling them to access post-school institutions and fulfill dreams of careers thought to be unrealisable

• To further develop post-graduate studies to ensure the expansion of the academic profession and development of high level knowledge and skills

• To diversify provision based on open learning principles to improve learning opportunities across the Post-School Education and Training sector by expanding and strengthening the post-school distance education landscape


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• To integrate disability into the broader policy arena by introducing a national policy to guide education and training institutions in the post-school domain

• To integrate Recognition of Prior Learning (RPL) into the post-school education and training system


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The Department’s budget structure is based on its organisational structure and consists of five programmes that represent Branches in the Department. The programmes are as follows:1) Administration

Provide strategic leadership, management and support services to the Department2) Human Resource Development, Planning and Monitoring Coordination

Provide strategic direction in the development, implementation and monitoring of Departmental policies

and the Human Resource Development Strategy of South Africa

Overall Assessment of 2015 Appropriation Bill

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3) University EducationDevelops and coordinates policy and regulatory frameworks for an effective and efficient university education system. The Branch also provides financial support to universities, the NSFAS and national institutes for higher education

4) Vocational and Continuing Education and TrainingPlans, develops, monitors, maintains and evaluates national policy, programmes, assessment practices and systems for vocational and continuing education and training including for TVET colleges and post-literacy AET

5) Skills DevelopmentPromotes and monitors the national skills development strategy. Develops a skills development policy and regulatory framework for an effective skills development system


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• The budget also includes “direct charges” which are amounts reflected that constitute a direct commitment from the National Revenue Fund in terms of specific legislative requirements and are not defined as Voted funds such as for the above five programmes

• The “direct charge” for the Department is the skills levy revenue collected by the South African Revenue Service (SARS) for the Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF)

• The direct charges increases at an annual average rate of 9.6% from R13.2 billion in 2014/15 to R17.4 billion in 2017/18 and amounts to R14.690 billion for 2015/16


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• For the 2015 MTEF, the Department’s budget (excluding direct charges) increases at an annual average rate of 5.9%, from R39.0 billion in 2014/15 to R46.3 billion in 2017/18

• The amount of R41.8 billion for 2015/16 is an increase of R2.9 billion (nominal increase of 7.3%) on the 2014/15 allocation

• This allocation includes a budget cut for cost containment to the amount of R24.5 million and additional funding from the provincial equitable share for the TVET and AET function shift to the amount of R2.2 billion


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• The Department’s budget is dominated by Programme 3: University Education, which represents 78.5% of the budget in 2015/16. As a result, transfer payments also dominate the budget in terms of the economic classification of expenditure

• Normal Departmental services represents 18.67% of the budget when we exclude university transfers, transfers to public entities, Technical and Vocational Education and Training colleges, Adult Education and Training centres, other organisations and earmarked funds

• Of this, compensation of employees amounts to R7 308.192 million (17.5%) for 2015/16. Remaining funds for operations amounts to R505.310 million in 2015/16 which represents only 1.21% of the budget


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• The Department acknowledges the current fiscal constraints of Government

• This has numerous challenges in itself, but also has a serious impact on the service delivery requirements of the Department

• The Department implemented the cost containment regulations by National Treasury

• Additional cost containment measures have also been approved by the Director-General in order to ensure that key service delivery receives priority

• The Department is also looking into ways in which effectiveness could be improved to reduce costs but meeting the same objective

Key Budget Pressures Facing the Department

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• The current budget constraints makes it difficult for the Department to attain the growth requirements within the post-school education system in terms of enrolments, infrastructure development (including student accommodation), increased operations and student support services

• A key shortfall is student financial assistance through NSFAS• Limitations are placed on Departmental operations due to

the capping of compensation of employees and the inability to roll out the new proposed staff establishment and regional presence due to the finalisation of the function shift of the TVET and AET Sectors. This include key IT expenditure for the required connectivity of all staff


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• Institutional monitoring and evaluation is limited to most critical areas

• Reliance on NSF project support such as the funding of the activities of the National Artisan Moderation Body

• An immediate pressure is the management of the TVET and AET function shift as well as cost implications for examination services (TVET College qualifications and GETC-ABET Level 4 qualification). The Department is able to result all 9 examinations cycles associated with these qualifications. Some activities critical to the integrity and approval of release of results have had to be downscaled or eliminated due to budget constraints. Increasing TVET enrolments is also impacting on the examination budget and service delivery in this area


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• The Higher Education Aids project has proved to be very successful. The current subsidy by the Department is limited to the University Sector, while roll out started in the TVET sector. Additional financial support for the project is critical to ensure the effective roll out to the TVET sector


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• The Department currently has 21 SETAs and 5 other Schedule 3A public entities. In addition, oversees 26 universities, National Institute on Human and Social Sciences, 50 TVET Colleges and more than 3 500 AET Centres

• There are numerous challenges, but the Department has the necessary policies and procedures in place for the monitoring and evaluation of the entities and institutions

• The Department is, however, not in a position to perform monitoring and evaluation at its fullest extent, as the limitations on operational funding do not allow it

• All legislative requirements for monitoring and evaluation are performed

• Reporting takes place to Parliament, the Executive Authority and Accounting Officer and feedback is provided to clients

Performance of Public Entities

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• All the SETAs and other Schedule 3A public entities reports to the Department in terms of the provisions in the PFMA and Treasury Regulations. This include the following:- Strategic Plans

- Annual Performance Plans and Service Level Agreements (for SETAs)- Quarterly Reports- Annual Reports

• In the case of the SETAs, SAQA, QCTO, NSFAS and CHE, monthly financial reporting is currently being under consideration

Performance of Public Entities

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• Block Grants [R20,538 billion in 2015/16 ]

• Teaching Input• Teaching Output• Research Output• Institutional Factor

• Earmarked Grants [R9,800 billion in 2015/16]

• NSFA• Teaching and Research development grants• Infrastructure and Efficiency Funding• Establishing the 2 new universities• Foundation Provision• Veterinary Sciences• Clinical Training Grants • Multi-campus Grant • Interest and redemption on loans• African institute for Mathematical studies• HDI Development grant

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Components of the University Funding Framework

……..

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Funding Allocations 2013/14 – 2016/17

• Number of earmarked grants which, in different ways, contribute directly to improving student success:- Teaching Development Grant (R616.9 million)- Research Development Grant (R199.0 million) - Both aim to enhance the effective of university academic

staff in the core roles as educators and researchers- Significant successes have been achieved, and evidence

shows that success rates are rising• Challenges include sustainability of the many initiatives

introduced with TDG and RDG funds, e.g. tutoring and mentoring programmes, and writing centres

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Student Success

• Foundation Provision Grant:- 2015/16 – R304.470million- Main purpose to improve the academic performance of

first-time entering undergraduate students, who already comply with the minimum requirements to enrol for a particular university qualification, and who have already enrolled for that qualification, but who are at risk of dropping out due to their poor educational backgrounds

- Students are placed on Ministerial approved extended curriculum programmes, which are in most cases one year longer than the regular qualification

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Student Success

• The Department has embarked on a rigorous monitoring and evaluation processes with respect to earmarked grants to ensure that the funds are effectively utilised

• In respect of the Teaching Development Grants: in 2014/15, this enabled the re-prioritisation of R272 million to support the New Generation of Academics Programme (nGAP) which represents a different way of supporting academic quality and throughput at universities

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Cost Containment Measures

• Partnership established with the ETDPSETA to support universities to collaboratively develop the Advanced Diploma in Technical and Vocational Teaching - R1.5m allocation from the ETDPSETA

• European Union: 20 million Euros - 2015/16 to 2019/20. The Teaching and Learning Sector Reform Contract will focus on qualitatively strengthening teacher education at universities with a focus on the following areas: ECD educator programmes; inclusive and special needs teacher education; primary teacher education and TVET and CET lecturer education

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Leveraging Partnerships

• With respect to the implementation of the Staffing South African Universities Framework, the Department is working at partnerships with a number of international donors (e.g. Newton fund) to leverage scholarship opportunities to support mobility programmes, as well as a partnership with DST and the NRF to align programmes to more effectively meet joint DHET and DST goals

• For student housing, the PIC, DBSA and other stakeholders have been approached to assist with funding models and leveraging of funds to accelerate provision of student housing

• Student Housing Symposium planned in June 2015 to meet with a wider group of stakeholders in the financial and property development industry

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• Large numbers of earmarked grants ( R9.8 billion in 2015/16)• Greatest risk: insufficient operational funds and manpower

to properly monitor, plan and evaluate projects. A percentage of the funds should be made available for this purpose to ensure effective and efficient use and accountability

• To mitigate the problem, the Minister approved a five year Sector Monitoring, Evaluation and Support Programme, funded through an earmarked grant from 2015/16 onwards in partnership with a university. This will assist with processes, however it is not ideal as this capacity should be built within the Department

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Monitoring and Evaluation

• New universities in Mpumalanga & Northern Cape- Significant funding made available in the baseline for the

ten year infrastructure development programme which is on track

- Limited funding made available for the simultaneous expansion in terms of headcount enrolments. The appropriate resources to support operational funding (to support teaching, learning and research activities) are minimal

- Risks: institutions are at risk of not being in a position to support increased enrolments in line with infrastructure development. The state must fund the institutions growth trajectories until they are able to generate sufficient funds

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Significant Projects and Possible Risks

• The establishment of Sefako Magkhato Health Sciences University and its incorporation of the MEDUNSA campus of University of Limpopo (UL)

• Challenges and risks:- The capacity of SMU to execute its full mandate- Risk of inadequate resourcing as a cost intensive health

and allied sciences university, especially resources to appoint specialised staff (on main funding framework)

- Risk of adequate clinical training platforms not being implemented (DoH’s academic/ tertiary hospitals)

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• Expansion of medical schools to meet the needs of the health care system:- Expected expansion of the production of health

professionals, especially medical doctors without appropriate funding to support enrolment growth

- The development of a new medical school (at UL), as agreed between the Ministers of HET and NH, without additional funding

- A second new medical school at NMMU is also being seeded though an initial grant of R10 million from the NSF but will require additional resources to succeed

- Medical doctors trained in Cuba – challenges for the system linked on their return

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•SSAUF is a comprehensive, transformative initiative to change and renew the academic profession in South Africa:

- First Phase implementation, the New Generation of Academics Programme (nGAP): The first cohort of ‘new academics’, at least 80% black and/or women, are expected to be appointed by late 2015 into permanent academic posts

- Challenges - capacity in the systems (universities as well as the Department) to run effectively this complex long-term initiative, and in maintaining the levels of funding needed to support it

- A further challenge lies in attracting gifted young black and female students and graduates to the academic profession, and sustaining this interest

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• Agricultural Colleges process- Function shift without transferring sufficient provincial

funds is the major risk• Central Application Service (CAS):

- Sector resistance in terms of mandates of applications especially universities and SETAS

- Diverse processes of application in a diverse post school system

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• One of major shortcomings - funding falls far short of demand

• 1991 - 2015, the Department’s NSFAS funding for loans and bursaries for university and TVET students increased from R441 million to R6.3 billion

• Allocations to universities will increase from R3.3 billion in 2011 to R4.3 billion in 2016

• To fully fund all qualifying NSFAS university students and meet the goals of the National Development Plan, an amount of R36 billion over the 2015 MTEF period is required

• Number of students supported at universities estimated at 205 000 over the MTEF, assuming current levels of support are maintained and fees do not increase radically and does not include full cost of study for all

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National Student Financial Aid Scheme

• However, unaudited data provided for the 2014 academic year by NSFAS shows that the number of students has decreased from 194 923 for the 2013 academic year to 187 276 for the 2014 academic year

• To maintain the level of funding and number of current students an additional R1 billion (escalating at inflationary rates per annum) is required

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National Student Financial Aid Scheme

• New Historically Disadvantaged Institutions (HDIs) Development Grant prioritised

• 8 contact universities will be supported through the HDI Grant:- Universities of Fort Hare, Limpopo, Venda, Walter Sisulu,

Western Cape, and Zululand; Mangosuthu University of Technology; and Sefako Makgatho Health Science University

• Funding over the MTEF: R410.734 million for 2015/16 and an indicative amount of R433.532 million in 2016/17

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Historically Disadvantaged InstitutionsDevelopment Grant

• Development funds will be allocated for a 5-year period from 2015/16 to 2019/20

• Purpose:- Put in place systems to develop and sustain financial

health at these universities- Strengthen academic enterprise- Realise potential

• Earmarked grant will be based on approved plans • Continuation on basis of detailed progress report and

satisfactory audit reporting of the use of the funds

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• Plans should also strengthen and streamline academic, management and administrative systems, through the following measures:- Reduce student over-enrolment- Improve the student experience, especially at first year

level- Develop niche academic and research areas

• At end of 5 years (2019/20) Minister will determine:- Need to continue HDI Development Grant- If continued, which institutions should continue to be

supported- How phasing out of the grant should be implemented

from 2020/21 onwards41


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For the period 2012 – 2015 infrastructure allocations to HDIs amount to more than R2.5 billion of the available R6 billion. This represents 42% of the total funds whilst

the HDIs only represented 15% of the actual teaching input units in 2013

For the period 2012 – 2015 infrastructure allocations to HDIs amount to more than R2.5 billion of the available R6 billion. This represents 42% of the total funds whilst

the HDIs only represented 15% of the actual teaching input units in 2013

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Historically Disadvantaged Universities Improvement in Infrastructure Allocations

All the HDIs have received much higher increases in their block grants compared to the average for all universities over the period 2004/05 to

2014/15 as a result of the introduction of the current funding framework

All the HDIs have received much higher increases in their block grants compared to the average for all universities over the period 2004/05 to

2014/15 as a result of the introduction of the current funding framework

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Total Percentage Increase in the Block Grant for the HDIs over the Period 2004/05 to 2014/15

• Total allocation (2015/16): R6,1 billion- Compensation of Employees: R4,9 billion (80%)- Subsidies: R1,1 billion (18%)- Goods and services: R95 million (2%)• Total retention of approximately 80% of total allocation by

Department to compensate staff on PERSAL due to function shift 1 April 2015. This retention is based on 63% approved staff cost including a provision of 63% of 80% of bursary support funded via NSFAS

• TVET subsidies are in support of operational cost for TVET Colleges and paid in 3 payments by the Department, namely April, September and January during each financial year

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Key Components of the TVET College Funding Framework

• A comprehensive teaching and learning plan will be developed and institutionalised and monitored to support Colleges to ensure that Colleges improve teaching and learning

• A foundation programme will be developed for grade 9 learners wishing to access vocational programmes. This programme should improve the success rate of learners in the TVET sector

• A placement test is being explored which will aim to channel learners in suitable fields of study. This will work in tandem with the foundation programmes

• The Department will develop a protocol for the secondment of sector specialists to Colleges to support improved teaching

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Student Success

• A video based lecturer development system is being implemented through a Dutch funded project. This will enable the department to reach significantly more lecturers in a shorter time. Initially this will focus on curriculum updates for lecturers

• A framework for partnership development and management will be developed to support cooperation between Colleges, industry, other Government Departments as well as international counterparts

• A dual system programme will be piloted with the newly developed occupational programmes to test implementation in the Colleges

• Systematic reform of the N4 - N6 programmes will continue under the guidance of the QCTO

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Student Success

• The NC(V) policy will be reviewed under the guidance of Umalusi

• Policy on student attendance (minimum 80% student attendance required) and implementation thereof

• Development of foundation programmes and students academic support programmes

• Challenges to improve student success include:- Student strikes and damage to property- Lost teaching and learning time due to students and

staff/lecturer strikes- Poor/limited career guidance and choice of programmes- Outstanding student certificates – limited accurate picture on

the performance of the TVET college sector

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Student Success

• Infrastructure – new campus sites- Funding made available through NSF and SETA

contributions- 16 sites in Rural areas. Construction at first 3 sites

commenced namely Thabazimbi, Inkandla A and Bhambanana

- Risks: Colleges are at risk of not being in a position to support increased enrolments in line with infrastructure development. Additional subsidies are required for operations to ensure that the full potential of the new sites are achieved

- There is a need to create a dedicated Infrastructure Support Grant for the TVET Sector

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• TVET Funding Framework review:- A Ministerial Committee was appointed to review the current

funding framework for Technical and Vocational Education and Training (TVET) and Community Education and Training (CET) Colleges and to make recommendations on the most appropriate funding framework

- The main reason for the review is to ensure the effectiveness of the funding framework in enabling TVET Colleges to play a key role in producing a skilled and capable workforce to support an inclusive growth path

- This will culminate in the proposed new and/or revised funding norms

- Analysis will be performed on the current funding framework and to make an international comparative analysis

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• SAICA Support Chief Financial Officer and Human Resource Support project:

- The Department has collaborated with the South African Institute of Chartered Accountants (SAICA) towards a management capacity development initiative currently implemented at all public TVET Colleges

- Main objective is to strengthen institutional capacity of TVET colleges to improve their:

o Performanceo Efficiencyo Financial management

- Qualified Chartered Accountants and Human Resource Generalists have been deployed to public TVET colleges under this project

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• Inherent system and project challenges:- Prioritised to fill all key management vacancies in colleges- High CFO vacancy rate- Inability of skills transfer, thus compromising College Finance and HR

sustainability- Colleges might be compromised and destabilised if vacancies are not

filled or when the SAICA project ends- Establishment of the South African Institute for Vocational and

Continuing Education and Training has the specific aim to improve the quality of teaching and learning in TVET and Community colleges. Without fiscal funding it is not possible to establish and effectively operate this entity. Measures are currently being put in place to perform some of the SAIVCET functions within the Department but for longer term sustainability, fiscal funding must be considered

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• Partnerships have been established with universities to support the delivery of level 5 Higher Certificate programmes

• Programmes are being developed in conjunction with other Government Departments to support skills development, e.g. Department of Health and Transport

• Significant partnerships have been established with international donors who are supporting the following projects:- CINOP: Lecturer development project- EU: University based lecturer programmes developed- GIZ: Dual system pilot projects- Danida: Student support projects- Swiss: Swiss companies and the Swiss embassy supporting

a college improvement project52


• NSFAS funding (2015/16): R2.2 billion- NCV: R1.2 billion (56%)- Report 191: R725 million (34%)- Student allowances: R218 million (10%)

• This bursary funding currently supports approximately 252 000 students

• To fully fund all qualifying NSFAS TVET students and meet the goals of the National Development Plan an estimated additional amount of R22.3 billion would be required over the next three year MTEF cycle as follows:- 2015/16 – R5.4 Billion- 2016/17 – R7.7 Billion- 2017/18 – R9.2 Billion

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TVET NSFAS Funding

• The Department is monitoring and evaluating the activities of TVET Colleges through the following: - TVET College Strategic Plans developed in conjunction

with the Department- TVET College Strategic Plans approved by the Minister- Performance agreements for TVET College Principals- A monitoring and evaluation framework – quarterly- College Councils playing an oversight role- Review of TVET Colleges Annual Reports

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VCET Cost Containment Measures and Monitoring Performance

• The Department is in the process to develop an enhanced monitoring and evaluation framework for TVET Colleges that will include amongst others, financial, governance as well as curriculum oversight processes. This will also include a student support plan

• Cost containment measures as well as sound procurement processes have been reinforced by the Department into TVET Colleges through the implementation of an approved Supply Chain Management Policy that has been aligned with the National Treasury procurement guidelines

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VCET Cost Containment Measures and Monitoring Performance

• The Department acknowledges and appreciates the current funding and appropriations for the Post-School Education Sector

• Based on the assessment of the Department’s appropriations, it would not be possible to meet all the NDP goals

• Additional funding would be required to meet goals and ensure the effective expansion of the system including the required support to ensure all funded entities effectively spend transferred funds and meet their performance targets

• The Department acknowledges that improvements are required in terms of student success throughout the Post-School Education and Training System and remains committed to ensure that the budget is aligned with the broader sector to ensure the effective performance in terms of Outcome 5

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Summary Remarks

Thank You

Documents

DEPARTMENT OF HIGHER EDUCATION AND TRAINING Presentation to: Standing Committee on Appropriations 2015 Appropriation Bill 26 May 2015